We understand it can be challenging for employers to keep up with legislative changes and news in the super space.
Here’s a quick overview of changes for the second quarter of this financial year.
SG rate to change
The Super Guarantee (SG) rate is set to increase to 10.5% on 1 July 2022. From then, the rate will increase by half a percent each year until it reaches 12% in July 2025. As Australians live longer and population growth slows, there’ll be fewer working people paying taxes. So an increase in the SG will take pressure off the broader government budget and the overall economy. Over time, this increase will positively impact the retirement outcomes of many Australians.
Changes to Australia’s super system
The new Your Future, Your Super reforms are now in force and include:
- an annual performance test for super funds from 1 July 2022,
- stronger requirements for trustees to act in the best financial interests of members, from 1 July 2022
- super ‘stapling’, where a single super account will follow an employee from job to job, from 1 November 2022, and
- introduction of a new super comparison tool to allow comparison of MySuper products, from 1 July 2022.
Federal budget 2021 announcements
Super-related changes announced as part of the Federal Budget 2021 have now been passed by the Government. The following changes will apply from 1 July 2022:
- The $450 per month threshold will be removed to expand the super guarantee to eligible employees regardless of their monthly pay.
- The minimum age for the downsizer contribution will be lowered from 65 to 60, allowing eligible Australians to make a one-off post-tax contribution of up to $300,000 per person when they sell their family home.
- Changes to first home savers scheme mean that eligible individuals will be able to release up to $50,000 (currently $30,000) to assist with the purchase of their first home.
- Individuals aged between 67 to 74 years old will be able to make or receive personal contributions and salary sacrificed contributions without meeting the work test (existing contribution caps still apply). The work test will continue to apply where an application for Personal Deductible contributions is made.
Changes affecting members effective 1 July 2021
Contribution caps limiting how much individuals can add to super each year increased from 1 July 2021. The cap on concessional contributions rose from $25,000 p.a. to $27,500 p.a. while the cap on non-concessional contributions increased from $100,000 to $110,000 for the 2021–22 year (subject to a total super balance).
AustralianSuper passes APRA performance test
Since 1 July 2021 all MySuper products will undergo yearly performance tests under new legislation called Your Future, Your Super. The tests are designed to highlight weak performance so customers can choose the best fund possible. AustralianSuper MySuper products all passed this comparison test and have been judged as performing by industry body Australian Prudential Regulation Authority (APRA). The first performance tests will be measured on an account’s average annual returns over 7 years and their fees over the last year. MySuper is an industry term used to identify a super fund’s basic offer. If you or your employees are with a fund whose MySuper products have failed the test and classified as underperforming, you can expect a letter from your super fund letting you know.
New product design and distribution obligations
From 5 October 2021, new product Design and Distribution Obligations (DDO) require issuers and distributors of financial products, including super funds, to have a customer-centric approach in designing and distributing their products. A TMD isn’t intended as financial advice, and employers and their staff should refer to the relevant Product Disclosure Statement (PDS) for detailed product information. You can view AustralianSuper’s TMDs at australiansuper.com/tmd
December 2021 investment performance
It’s been another positive quarter for AustralianSuper members with a return of 3.19% in AustralianSuper’s Balanced option for the three months ending 31 December 2021. This brings the return in this option to 14.99% for the 12 months ending 31 December 2021 and 10.65% per annum over 10 years.*
Member products and services
Study finds older workers face age-based stereotypes
A project led by AustralianSuper and workplace experts Transitioning Well, has identified that older workers are often overlooked for promotions, and even stereotyped, based on their age. Find out how to recognise that stigma and more by reading about the study below.
Education for members
AustralianSuper hosts regular live webinars on a range of topics to help members manage their super and get the most out of it. There’s also a library of recorded sessions members can watch any time.
* Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns. Returns from equivalent investment options of the ARF and STA super funds are used for periods before 1 July 2006.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/pds or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.
AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.